ASEAN Morning Bytes
Rally picks up steam as US finally rolls out fiscal package but economic numbers suggest a long drawn out battle ahead
EM Space: Hopes for a quick recovery boost market appetite
- General Asia: Investors looked past bloated jobs claims figures and took comfort in the deal struck between US lawmakers to get the fiscal package through for Trump’s signature. With both fiscal and monetary authorities brandishing all the heavy artillery to combat the economic fallout from the crisis, market players decided that we may be in for a sharp economic recovery after a few months. All of this happened as the number of cases in the US has surpassed those in China so we may be in for some more volatility ahead as economic data releases will likely continue to sour in the next couple of months.
- Indonesia: Indonesia is mulling issuing an IDR-denominated bond to build a rescue-fund for beleaguered corporations in the near term. Authorities are seeking Presidential approval for Bank Indonesia (BI) to be granted permission to purchase these bonds from the primary market to help support the issuance as they are currently barred from doing so. Finance officials concede that the budget deficit will likely exceed 3% of GDP this year while BI Governor Warjiyo indicates that the worst of the sell-off may be behind them with the pace of foreign selling slowing down. Nonetheless, Warjiyo vowed that the central bank would continue to purchase bonds in the secondary market to support the currency and bonds, saying that the central bank was willing to do this "indefinitely".
- Philippines: The Bankgo Sentral ng Pilipinas (BSP) released another Php20 bn to the national government in the form of “advanced dividend” payments to help fund recovery efforts for Covid-19. This is one of the many measures the monetary authority has resorted to in the past two weeks to support the economy. We expect BSP to continue to deploy reductions to reserve requirements and cuts to the policy rate as the President was granted special powers to compel BSP to adjust monetary policy if needed.
What to look out for: Covid-19 developments
- Philippines budget balance (27 March)
- Thailand GIR (27 March)
- US consumer sentiment (27 March)
"THINK Outside" is a collection of specially commissioned content from third-party sources, such as economic think-tanks and academic institutions, that ING deems reliable and from non-research departments within ING. ING Bank N.V. ("ING") uses these sources to expand the range of opinions you can find on the THINK website. Some of these sources are not the property of or managed by ING, and therefore ING cannot always guarantee the correctness, completeness, actuality and quality of such sources, nor the availability at any given time of the data and information provided, and ING cannot accept any liability in this respect, insofar as this is permissible pursuant to the applicable laws and regulations.
This publication does not necessarily reflect the ING house view. This publication has been prepared solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but ING does not represent that it is accurate or complete. ING does not accept any liability for any direct, indirect or consequential loss arising from any use of this publication. Unless otherwise stated, any views, forecasts, or estimates are solely those of the author(s), as of the date of the publication and are subject to change without notice.
The distribution of this publication may be restricted by law or regulation in different jurisdictions and persons into whose possession this publication comes should inform themselves about, and observe, such restrictions.
Copyright and database rights protection exists in this report and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of ING. All rights are reserved.
ING Bank N.V. is authorised by the Dutch Central Bank and supervised by the European Central Bank (ECB), the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM). ING Bank N.V. is incorporated in the Netherlands (Trade Register no. 33031431 Amsterdam).